The autumn property market remains cautious but signs of resilience remain across sales and lettings.
The latest RICS UK Residential market Survey points to a more cautious picture across the housing market in September, with higher interest rate expectations and wider economic pressures weighing on confidence.
However, the overall picture is not entirely negative. While buyer demand and sales activity softened slightly during the month, both remain noticeably stronger than the lows recorded earlier in the year.
RICS also continues to expect the market to stabilise over the longer term, suggesting that September represented more of a pause in momentum than a complete change in direction.
Residential Sales Market
Sales activity remains subdued, but conditions are still improved from earlier in the year
Buyer demand slipped slightly in September, with the new buyer enquiries balance moving to -22%. This was the first month since March 2026 in which the measure had not improved, although it remains comfortably above the -41% low seen six months earlier.
Perhaps more encouragingly, new sales listings moved into positive territory for the first time since mid-2025, with a modest increase in new instructions recorded during September. This suggests sellers are still coming to the market despite the uncertain economic backdrop.
House prices continue to face some downward pressure nationally. However, the longer-term outlook is much more settled, with house prices expected to be broadly flat over the next 12 months, rather than continuing to fall.
For buyers, this remains a market where realistic pricing and careful decision-making are important. For buyers, the increase in properties coming to market could mean more choice and greater scope, particularly while demand remains subdued. With house prices still under pressure, understanding a property’s condition and any potential repair costs is especially important when deciding what to offer.
Watsons View – Valuation & Surveys
‘It is clear to Watsons that the market is tougher and properties are taking longer to sell, but are still transacting. Those properties that are achieving sales do so only where the pricing strategy is competitive and attractive to purchasers. New build properties in particular have reported a slow down in enquiries and sales rates, we are seeing additional incentives and part exchange deals being offered more frequently in order to achieve sales and a rise in the number of stock plots waiting to be sold.
We are anticipating a fairly stable market, with prices anticipated to hold in the short to medium term. The outlook however remains somewhat uncertain, with the broader economic headwinds still very much in place – including sustained inflation and the likelihood of an interest rate rise during Q4 of 2026 built into the mortgage market already with a number of lenders raising rates in the past few weeks – there appears to be no silver bullet to kick-start the housing market coming along in the near future.
Government intervention by way of the return or replacement of a help-to-buy scheme or similar would appear unlikely and there appears to be no appetite to change to stamp duty rates, given how costly to the treasury this would be and the current pressures on government budgets.
Therefore, we are expecting much of the same as we head into the final quarter of 2026 and into 2027.
Steven Foreman, Head of Valuation
Watsons Property Group Ltd
Lettings continues to show resilience
Lettings continues to show resilience
The rental market remains one of the strongest areas within the industry. Tenant demand increased again in September, with a net balance of +23%. Importantly, this was the third consecutive month in which tenant demand growth accelerated, showing that demand for rental homes remains strong even as the wider housing market becomes more cautious.
At the same time, landlord instructions remain subdued, meaning the supply of available rental homes continues to struggle to keep pace with demand. This imbalance remains a significant feature of the market and continues to support rental values.
Expectations for rent increases did ease slightly compared with August but remain well above the average seen during the first half of the year, and there may be expected rent rises over the next three months. However, affordability still remains an important consideration for tenants and landlords alike.
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Watsons View – Lettings
‘The autumn figures underline the resilience of the rental market, and this has been reflected at Watsons, where demand from tenants is indeed very strong and extremely high interest is always shown for those properties advertised at the more reasonable end of the price range. On average, we are receiving upwards of 5 applications per property. This shows the level of demand which shows no signs of diminishing.
Available property stock is currently every agent’s challenge, as demand outstrips supply, especially as the pool of landlords reduced in light of the unknowns that surrounded legislation changes earlier this year. For landlords that held steadfast and remained in the market, this sustained demand from tenants during a time of limited rental stock has certainly borne fruit.
The Government have now released dates for the PRS database, and at Watsons we are working closely with our landlords to guide them through this rollout. As ever, at Watsons, our focus is on providing clear advice and proactive management to help landlords move forward with confidence’.
Steff Summers, Lettings Manager
Watsons Property Group Ltd
For landlords, strong tenant demand remains positive, but the market is becoming increasingly complex. Supply pressures, affordability, regulation and longer-term investment decisions are all influencing behaviour, making professional management and good advice more important than ever.
Looking Ahead
Taken together, the latest figures suggest a housing market that is steadier, but still cautious.
There are signs that sales activity is beginning to recover from the weaker period seen earlier in 2026, although borrowing costs and affordability continue to influence decisions. For the rental market, the more immediate issue remains the balance between resilient tenant demand and the availability of suitable homes.
The coming months should provide a clearer indication of whether improving confidence in the sales market can develop into more sustained activity, while landlords and tenants continue to navigate a rental market where demand remains strong but supply is constrained.
Based on the latest RICS UK Residential Market Survey – September 2026 (Released 7 October 2026)
